How Much Should You Spend on a Job Hunt?

By Mary Pilon

manufacturedenvironments.com

The “latte effect” meets the laid-off budget.

Most career counselors advise unemployed job-seekers to get out there and make contacts — as the conventional wisdom goes, you’re more likely to find a new gig from a personal connection rather than an online job application.

But the cumulative costs of all the coffees, lunches, drinks and events can quickly add up, stressing already-tight budgets. It’s remarkably easy to spend hundreds, if not thousands of dollars on a job hunt, so job seekers should be clear on what makes a good investment in their future, and what’s really just discretionary spending in the guise of career-building.

Most of us want to put our best feet forward: nice restaurant, good outfit, travel across town if need be. The hopeful result of such networking is a job, permanent or even temporary. Job hunting has created a whole industry of high-price career fairs, networking events and web sites. And with the slow rate of hiring, the spending can go for months with no job offer.

So how much is appropriate to spend?

There’s no single formula or amount for everyone, says Lauren Locker, a certified financial planner with Locker Financial Services, LLC, in Little Falls, N.J. Things that figure into the calculus: Are you single or supporting a family? Are you interviewing for a six-figure executive position or something entry-level? What are your laid-off cash reserves looking like? How long have you been unemployed? The answers to these questions will vary, but Ms. Locker says that regardless of your station, it’s good to err on the frugal side.

Sometimes job hunters are posed with questions of calculated risk, such as hopping on a plane to meet a prospective employer. Companies, also feeling the crunch, aren’t as eagerly flying in job candidates. But Ms. Locker says that if you’re more than 60% confident that a job far away could work out, it may be worth buying that plane ticket. Make the most of your trip — schedule other meetings where you’re headed, and of course travel on the cheap. That means booking the lowest-price ticket available, staying with friends or family and taking public transportation, no matter how unpalatable or unglamorous. “The employer is not going to be looking out the window to see how you got there,” she says.

Closer to home, you can trim your networking costs by suggesting in-office meetings in lieu of lunches or drinks. Some prospective employers, squeezed for both budget and time, may welcome the opportunity to meet at an office instead of a restaurant. Or scale down a full dinner with drinks to a more modest cup of coffee.

Beware the slippery slope of spending under the guise of investing in your career. Ms. Locker says she sees clients who justify “job hunting” expenses like a daily latte or a new iPhone by arguing that their increased presence in a coffee shop or ability to stay in constant email contact greatly enhance their job hunts. Although this could be true in some cases, it’s more likely a way to avoid cutting discretionary spending. Beauty treatments and manicures — purchased in the spirit of keeping you looking tidy — can also be a frivolous expense, she says. (An emery board and a bottle of clear nail polish will almost always do the job.)

Some swear by industry conferences, which can run into the thousands, and networking sites such as TheLadders.com which costs $30 a month for a premium account. Before taking on those expenses, Ms. Locker advises that job-seekers ask themselves whether these methods have proven effective in the past.

She also notes that sometimes people have unrealistic perceptions of return on investment for many job-hunting expenses. For example, one may spend $5,000 on networking and so forth in anticipation of landing a job with a salary of $100,000 or more, when that person should really expect a salary closer to $60,000. Many industries are readjusting salaries, so do your homework and get a realistic picture of what you might earn in a new position.

When it comes to those networking sites, consider free options like LinkedIn. Ms. Locker also recommends checking out bulletin boards at local public libraries which can be hubs for free networking groups. Even if jobs don’t immediately sprout from the meetings, it might be helpful to know you’re not alone.

Comments (3 of 3)

Lets get this correct. It's you're' not YOUR'. I like mac, I use both widnows and mac. And yes, i'm gay. You have to be really young to realise that I didn't say I don't like mac or mac is bad anywhere in my comment, and that you can get You're' and Your' mistaken.

11:46 am September 2, 2009

Financial Samurai wrote :

Spending money on the job hunt? $5,000? Who has that to spend if they are unemployed? Come on Wallet, get realistic here.

It's called using the Internet for free, and going through normal interactions with real people. Sure, maybe you buy a lunch or whatever for someone, but you've got to eat anyway right?

There should be minimal monetary cost to networking. The only people getting rich are these networking promoters. It's their business.